In real estate taxation, Like-Kind Property is a term used in tax deferred exchanges under Section 1031 of the Internal Revenue Code. It refers to property that is exchanged for other property of the same general nature or character, allowing the deferral of capital gains taxes.
Like kind does not mean the properties must be physically similar. Instead, the determination is based on the taxpayer’s purpose and intent, such as holding both properties for investment or business use. Most real estate held for investment is considered like kind to other real estate held for the same purpose.
